What's cheaper today than 20 years ago & what's risen well above inflation - it's telling:
Bottom Line: The American Enterprise Institute is out with a 20 year study of the impact of inflation in our everyday life. It's really telling. Here are highlights of the findings:
Overall inflation rate: 57.1% (that means that a dollar today only has the buying power of about 43 cents twenty years ago).
That being said there are many products and services that are well above that rate and others that are well below. Here are products and services that are actually cheaper than 20 years ago:
- Computer software
- Cellphone service
Here are categories that rose in cost below the rate of inflation:
- Household items
Here are categories that rose above the rate of inflation (percentages rounded):
- Housing - 60%
- Food - 60%
- Healthcare - 115%
- Childcare - 135%
- College Tuition - 200%
- Textbooks - 220%
So no wonder life feels less affordable for the average person. Life's necessities were all on the leading end of the inflation curve. But let me ask...does it strike anyone as odd/interesting that education and health/childcare were the areas of the most rampant inflation increases? Does it also strike anyone as odd that the federal government has had a heavy hand in "reforming" access to these categories? No wonder there's a student loan crisis. The cost of education has risen at four times the real inflation rate of the past two decades. Who's to blame? The education establishment along with the federal government who co-opted the student loan programs allowing for virtually any level of debt to be taken on by students. There is no justifiable reason as to why education has had the highest inflation rate. And right behind it. No wonder healthcare is unaffordable for nearly 40% of Americans. It's risen by 2x-3x the inflation rate of the past twenty years. Once again the government's role to continue to mask consumer/market forces in lieu of the insurance first model has led to unjustifiable increases. This is what happens when we have the government attempt to "help us" or "fix things".
Take a look at everyone of the categories that are actually cheaper today than 20 years ago. What made that happen? Competition/market forces and consumer choice/transparency right? Ditto those categories that rose below the rate of inflation. Think the education establishment will be teaching this today?